Biggest shareholder backs DJs action

David Jones
’s largest shareholder, Ausbil Dexia, has defended the retailer, giving the board and its new chief executive the thumbs up. Ausbil Dexia chief executive
Paul Xiradis
has applauded the board’s swift action in removing disgraced chief executive
Mark McInnes
and has rebutted talk of a “blokey" culture at the department store.

Mr Xiradis, whose firm owns 8.5 per cent of its shares, said: “I didn’t see that at all in my discussions and my dealings with David Jones over the years.

“They were very focused on providing the right environment in order for them to deliver the right offering to their client base, which is largely female."

David Jones shareholders were braced for the worst after the shock resignation on June 18 of Mr McInnes after he admitted to inappropriate behaviour towards a female staff member.

But the stock has shed only 2 per cent of its value in the past week, to $4.40 compared with $4.51 last Friday.

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The board’s appointment of
Paul Zahra
, general manager stores and operations, to replace Mr McInnes helped limit the fallout.

Mr Zahra, who joined David Jones in 1998 and has 28 years’ retail experience, helped formulate strategies that have contributed to the retailer’s success over the past seven years.

Mr Xiradis said: “The market has reacted quite calmly overall, given it was such a shock and a surprise, what was announced last Friday.

“As far as the new CEO is concerned, he comes across as quite disciplined in the sense of understanding the business.

“He’s been very much involved in the store look, feel and management, and I think he should do a reasonably good job.

“The strategy is very much in place, and I don’t think things will change."

Mr Zahra said the scandal appeared to have had no impact on trading over the past week. “At last Friday’s media conference announcing Mr McInnes’ departure I said we were pleased with our trading performance in the first two weeks of clearance," he said.

“Since that announcement I am happy to report that the pleasing sales trend has continued, and there has been no apparent adverse impact on our trading performance.

“We believe that this indicates support for the company and reflects the strength and resilience of the David Jones brand."

Consumer sentiment has also improved in the past week, the Roy Morgan consumer confidence index indicates. More Australians think they are better off financially now than this time last year, and are more confident about their personal financial situation.

But investors have not ruled out future problems for David Jones if the employee who was the target of Mr McInnes’s unwanted attention takes legal action or if other claims emerge.The publicist, who still works for the retailer, engaged workplace lawyers Harmers to lodge a formal complaint with the board, which has ordered an independent inquiry.

Mr McInnes has apologised for his “errors of judgment".

Mr Xiradis believes any damage to the brand is likely to be limited.

“Decisive action has been taken," he said. “The organisation is bigger than one person.

“I’m not too sure there’s going to be too much of a reputational or brand risk to the organisation."